Understanding Why Different Insurance Agents Recommend Different Business Policies
When it comes to insurance policies, businesses often find themselves overwhelmed with the multitude of options available. Insurance agents can provide guidance on which type of policy would be best suited for the needs of each organization. However, it is not uncommon for insurance agents to recommend different business policies. In this article, we will explore the reasons why different insurance agents can offer varied suggestions for business policies.
Knowledge and Experience
One of the primary reasons why insurance agents may recommend different business policies is due to their knowledge and experience. Insurance agents may come from different backgrounds, have varying levels of education, and specialize in different areas of insurance. Therefore, their suggestions for which type of policy would be most beneficial for a particular business can vary. An insurance agent who is well-versed in providing coverage for business owners in a specific industry may have more insight into the unique risks and exposures that those businesses face, leading them to suggest a different policy than an agent who primarily deals with other types of businesses.
Company Preferences
Another factor that can affect an insurance agent’s recommendations is the preferences of the insurance company they work with. Sometimes insurance agents are required to sell a particular type of policy that is a priority for their company. For example, some insurance carriers may be focusing on increasing sales in the general liability sector, which could result in the insurance agent recommending a general liability policy over other types.
Customer Demands
Additionally, insurance agents may recommend different policies based on the demands of their customers. Some business owners may prefer certain types of policies that have worked well in the past, while others may desire different coverage options. If an insurance agent believes that a specific policy type would be more beneficial to a particular customer’s needs and preferences, then they may recommend that over other options.
Comprehensive Needs Analysis
Sometimes insurance agents may recommend different policies because they take the time to conduct comprehensive needs analysis with their clients. By analyzing the unique risks and exposures that a business faces, the coverage that the business currently has, and the business owner’s goals, an insurance agent can recommend policies that adequately protect the business. The result may be a different policy recommendation than other agents who did not take the time to conduct a comprehensive needs analysis.
Varying Communication Styles
Finally, insurance agents may recommend different policies based on their communication style. An agent who is more experienced and knowledgeable may be able to provide more in-depth explanations and recommendations, while an agent who is more focused on making sales may recommend a policy that is not completely compatible with the business’s needs. Sometimes, differences in communication styles can lead to different recommendations.
Competition in the Industry
Finally, the insurance industry, much like most industries, is highly competitive. Different companies offer different policies to attract clients. An agent is more likely to recommend a particular policy if the company they represent offers the policy at a competitive price. In some cases, agents have a financial incentive to recommend one policy over another.
Surplus vs Standard Insurance Carrier:
The main difference between surplus and standard insurance carriers lies in the types of risks they cover and the regulations they operate under:
Surplus Lines Insurance Carrier:
- Deals with high-risk or unconventional insurance needs that standard carriers typically avoid.
- Offers coverage for risks that are not readily available in the standard insurance market due to their unique nature or high potential for loss.
- Operates with more flexibility and less regulatory oversight compared to standard carriers, allowing them to underwrite non-admitted policies and adjust rates more freely.
- Often used for specialized or hard-to-place risks, such as unique properties, high-value assets, or industries with high liability exposure.
Standard Insurance Carrier:
- Provides insurance coverage for common risks and conforms to state regulations and industry standards.
- Offers a wide range of insurance products for personal and commercial needs, including auto, home, life, and business insurance.
- Subject to strict regulatory oversight by state insurance departments, ensuring financial stability, compliance with laws, and consumer protection.
- Typically preferred for standard insurance needs due to their reliability, established reputation, and adherence to industry standards and regulations.
- Some examples of standard insurance carriers that we represent are: Chubb Travelers Insurance Liberty Mutual
Surplus lines carriers cater to specialized or high-risk insurance needs with greater flexibility and less regulatory oversight, while standard carriers offer a broader range of insurance products under strict regulatory supervision.
In summary, multiple factors can affect why different insurance agents may recommend different business policies. While it can be challenging for businesses to navigate the different policies and recommendations, the key is to work with an insurance agent that you trust, who understands your business’s unique needs and preferences and conducts comprehensive needs analysis before making any recommendations. By selecting an insurance agent who is experienced and knowledgeable, you can rest assured that they recommend policies that help protect your business and its interests.
Reach out to Gordon Insurance to review your existing policy or talk about a new policy.
